Centre’s decision to procure 2 lt of onion will not help, say farmers and some traders

Traders at some agricultural produce marketing committee (APMC) yards in Maharashtra withdrew their boycott of onion auctions following the Union government’s announcement that Nafed (National Cooperative Agricultural Marketing Federation) and NCCF (National Cooperative Consumers Federation) will procure 2 lakh tonnes of onion from Maharashtra. 

But farmers and a section of traders were firm on the demand that the government must withdraw its decision to impose the 40 per cent duty on the export of the kitchen staple. The government announced on Tuesday that it will procure onion at the rate of ₹2,410 per quintal. 

• Also read: Soaring onion prices may Hurt PM Modi’s govt more than tomatoes

Traders, who had launched an indefinite strike and stopped onion auctioning from Monday to protest against the export duty, said the levy will disrupt the supply chain and have a long-term impact on the international market.  On August 19, the government imposed a 40 per cent export duty on onions to restrict outbound shipments and increase local availability due to apprehension about kharif’s production. But now, the government has simultaneously decided to buy 2 lakh tonnes more onions from farmers for the buffer stock. 

Former Union Agriculture Minister Sharad Pawar said the government’s decision to procure onions will not be of much help until the export duty is withdrawn. Maharashtra Chief Minister Eknath Shinde welcomed the government’s decision and called on farmers to stop agitating.

• Also read: Centre to buy onion from farmers at ₹24/kg against last year’s ₹14-17

Disrupting supply chain

“We are here to sell the onion to the government as we don’t have any other option. But the government must stop exploiting farmers, said Hari Gaikwad, a farmer in Pimpalgaon, Nashik, where the procurement centre started procuring onions on Tuesday.

• Also read: Export duty on onions: Amid protests, Union Minister tells farmers prices will not crash

“India is a major global producer and exporter of onions, with over $500 million in exports in 2022. This levy threatens the livelihoods of our farmers, who heavily rely on onion exports. It also disrupts the supply chains developed by traders, potentially harming our export market and benefiting competitors like the Netherlands, Mexico, and China” said Alekh Sanghera, Co-Founder and CEO at FarMart.

“Neighbouring countries like Bangladesh, Nepal, and Sri Lanka, who rely on our onions, may face food security issues. The implications of this decision are far-reaching, highlighting the complex relationship between economic policies, food security, and livelihoods,” he said.